Young traders using the Robinhood app are pouring cash into the stock of companies on the verge of bankruptcies, and their lack of basic knowledge about how trading works can easily result in the loss of money, Max Keiser warns.
Robinhood traders tend to show enormous interest in firms that are about to go bust, as was in case with Hertz and Chesapeake Energy stock, among other instances. The same recently happened to shares in mall operator CBL & Associates – Robinhood traders kept piling in when its owner was reportedly bracing to file for bankruptcy.
“Things trading at all-time lows tend to trade at new all-time lows,” Max Keiser said. “These Robinhood traders would be buying deckchairs on the Titanic.”
The host compared the situation to what we saw in the ‘90s, when people were speculating on the “birth” of companies, when they went public for the first time. “Here the millennials and Gen Z are speculating on the death of companies,” he said about the growing interest in such businesses.
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